Corporate Social (Ir)Responsibility

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When the idea of corporate social responsibility (CSR) started making an impact in the United States by involving corporations in the local community by assisting in social projects etc, it gained recognition as an important tool to get the private sector to accompany Governmental efforts in social engineering. It was a great idea which originated in the country –the USA- which is the incubator for new ideas. After a while, Mauritius copied the idea and brought in legislation to implement CSR. Unlike what happens elsewhere in respect of CSR, we in Mauritius have innovated and perfected it into a mechanism by which whatever is granted by a corporate body to the CSR comes back to it through intermediaries and affiliated companies or NGOs. CSR comes full circle and amounts to a misappropriation of the funds by those who are supposed to ensure that others benefi t from it.

Should the Government wish to know how exactly CSR is being utilised in this ‘plaisir’ country, it just has to ask simple questions about how the CSR money is used. The Government will be shocked to learn that the spirit behind CSR has been overtaken by what can only amount to corporate selfishness. The  major corporations have set up a CSR unit to handle all the funds that go out as CSR. Most of whatever goes out to CSR via the Unit comes back to the same company except that, in the process, a lot of media mileage is earned by the CSR contributor. No advertising fee is paid and it is a double whammy.

The way CSR is being transacted today is a disgrace. It was not intended to be used in such a way. Insider dealing and intercorporate manoeuvres ensure that CSR has become a farce. The Government has to step in so as to guarantee that corporate apartheid disappears. The major corporations which so often ‘font la lecon’ must carry out a review of their own management.

You must not be surprised if lengthy communiqués are issued to counter what this peice contains but a full and objective enquiry will reveal that all is not well with CSR.

For example, in all other countries there is an obligation to rotate external auditors after 4 or 5 years since too long an association between auditors and management is a danger for good corporate governance. It is shocking that most banks in this country keep the same auditors year in and year out. The Minister of Finance must look into this dangerous system of cronyism and cosiness.

This Government can change the legislation about CSR and about many other issues which negatively impact on the perception which small shareholders have of the companies they are invited to invest in. We are all aware of the annual attempts made by small shareholders of Air Mauritius and other institutions where the Government has invested taxpayers’ money to obtain reliable information about what goes on inside the boardroom are met with the derision and contempt of the directors. In the United Kingdom, shareholders are being given greater powers to rein in corporate excesses. The Prime Minister could on his next visit there take a few cues and implement them here.

There is another black – no pun intended- spot in our corporate world. It is the role of the ‘independent director’. The independent director is expected to act independently and in the interests of the company. But it is the mode of the appointment of the independent director that destroys his/her independence. The independence of the independent director has been hijacked.


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